July 2, 2008
DiNapoli Audit: Fund Balance of Green Island UFSD Three Times Legal Limit
Realistic Expense Estimates Could Have Reduced Tax Levy
Green Island Union Free School District’s unreserved fund balance totaled $737,166, more than three times the limit allowed by law, and multiple duties relating to the district’s financial operations were not appropriately segregated, according to an audit released today by State Comptroller Thomas P. DiNapoli.
“When school districts keep too much money in unreserved funds, taxpayers lose,” DiNapoli said. “Green Island Union Free School District’s unreserved fund balance was too high, and they didn’t have the right checks and balances in place to monitor spending.”
DiNapoli’s audit, covering July 2006 through October 2007, found the district’s unreserved fund balance totaled $737,166 in June 2007 or about 11 percent of budgeted appropriations for fiscal year 2007-08, which is more than three times allowed by law. Any fund balance at the end of the fiscal year that is more than three percent is supposed to be appropriated to the following year’s budget to reduce the district’s tax levy.
Auditors discovered the district maintained an excessive fund balance since June 2005 because it overestimated expenditures and failed to appropriate the funds to the next year’s budget. This most likely resulted in higher than necessary tax levies.
Auditors also determined that the district’s controls over purchasing and claims processing were not appropriately designed or operating effectively to safeguard the district’s finances. Prior to September 2007, the district did not have any written policies or procedures in place regarding purchases. As a result, expense claims were paid without proper authorization and supporting documentation.
In addition, the superintendent acted as the district’s purchasing agent and claims auditor even though Education Law expressly prohibits superintendents from acting as claims auditors. Failing to appoint an independent claims auditor put the district’s finances at risk of paying for improper or illegal claims.
The audit also found that the district:
The audit recommends that district officials:
The district’s full response is included in the audit.
Click here to view the audit.
School District Accountability: